updated 12:35 pm EST, Tue December 1, 2009

Rumor has YouTube charging for TV streams

Google could soon compete with iTunes by offering paid streams of videos through YouTube if a rumor from early today proves true. Multiple tipsters claim the video site has been in persistent talks with studios to let it charge for streaming, not downloading, individual TV episodes. The tentative system would cost $2 per show to stay consistent with downloadable services and would be available within a day after the episodes first air on TV.

All shows would come without ads. Although not stated in the MediaMemo slip, it's implied the cost would give unlimited access to a given show and could theoretically allow "cloud" streaming to non-computer devices that natively handle YouTube, like the iPhone as well as some HDTVs and networked set-top boxes.

It's not said how close a deal may be, though both sides are characterized as "optimistic."

Google is known to be pushing professionally made content and has been offering a small amount of movies and TV shows so far, but has largely limited this to older material and chosen free ad-sponsored versions instead of direct purchases. Dipping into paid content would significantly increase YouTube's commercial component but risks deepening a seeming rift between Google and Apple as the two would produce not just computer and phone operating systems but also content stores as well.

At the same time, Apple itself is rumored to be breaking away from the pay-per-show model and could offer a $30 subscription that would provide unlimited or near-unlimited TV shows each month.

Quality?

If I'm paying $2 per episode, the quality had better be DVD resolution (480p) or better. Youtube is not known for its video quality, even for content made available in "HD", which still looks like a** due to the low bitrate and/or crappy (Flash) playback decoder. Maybe if they dial down the compression and make the raw h.264 streams available, this could be usable.

Personally, the only way I would pay $2 per episode is if that got me an unencrypted h.264 format copy of the episode for permanent ownership, which I could then watch on any device I want, re-encoding if necessary. Until that happens, I'll keep paying my cable subscription and downloading the standard format captures from P2P.